Disinflation

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Disinflation

A decrease in the rate of inflation.

Disinflation

A situation in which the inflation rate decreases, but does not reverse. For example, disinflation occurs when the inflation rate goes from 5% to 2%. Importantly, it is not deflation when the inflation rate becomes negative. Disinflation is considered a normal and healthy part of a business cycle.

disinflation

A slowdown in the rate of inflation. A drop in the inflation rate from 3% in one year to 2% in the next year is an example of disinflation. On an overall basis, disinflation is good for security prices, but it can be painful for individual companies that have made investment and borrowing decisions based upon a belief that a high rate of inflation would continue. See also inflation.

Disinflation.

Disinflation is a slowdown in the rate of price increases that historically occurs during a recession, when the supply of goods is greater than the demand for them.

Unlike deflation, however, when prices for goods actually drop, disinflation prices do not usually fall, but the rate of inflation becomes negligible.

disinflation

a fall in the general price level, frequently accompanied by a reduction in the level of national income (DEFLATION). A disinflation is often deliberately brought about by the authorities in order to combat INFLATION and to eliminate a BALANCE OF PAYMENTS deficit. Instruments of disinflationary policy include fiscal measures (e.g. tax increases), monetary measures (e.g. higher interest rates), and prices and income controls. See FISCAL POLICY, MONETARY POLICY, PRICES AND INCOME POLICY, INFLATIONARY GAP, INTERNAL-EXTERNAL BALANCE MODEL.
References in periodicals archive ?
A look at survey measures of inflation expectations from three and six months after the announcement of QE2 show that disinflationary pressures abated after the program's introduction.
In the near term, real wages and consumer spending will be boosted by the disinflationary effect of the oil price shock.
Bundesbank stalling on quantitative easing allowed the disinflationary process to proceed unabated when it should have been cut short.
The short-term expectations measures are mixed; SPF expectations for the CPI one year ahead have signaled a disinflationary outlook, while expectations for other measures, such as SPF 1-year core CPI expectations and UM 1-ycar inflation expectations, have been more stable.
This was not an issue in the disinflationary environment of the last decade, but it is becoming more of one, which is probably what prompted World Bank President Robert Zoellick's proposal to restore a role for gold.
Furthermore, the increase in the adjusted CORE2 inflation rate was driven by the prices of goods and services that are sensitive to the movements in the RON/EUR exchange rate, as their influence was only partly mitigated by the disinflationary effects from the persistent demand shortfall.
I would still expect food prices to tail off a little bit later this year and food inflation to fall away and a disinflationary process towards the end of the year," said Daniel Kaye, senior economist at the National Bank of Kuwait.
Positions in inexpensive risk assets that could benefit from ongoing growth - developed equities in particular - clearly still need to be balanced by holdings in assets that offer some exposure to disinflationary news, in our opinion.
75 percent, and further rate cuts cannot be ruled out on the back of expectation for a gradual disinflationary trend.
Meanwhile, the full disinflationary impact of the large amount of spare capacity has not been felt yet," she said.
He said the Monetary Policy Committee (MPC) had recently voiced concerns that inflation had been slower to fall than anticipated, indicating the recession might not be as disinflationary as predicted.
The real question is how far the current food inflation will offset the otherwise disinflationary effects of retail competition.